The FCA has published Guidance Consultation 14/03: Retail investment advice: clarifying the boundaries and exploring the barriers to market development (GC14/03).
GC14/03 covers the following issues, namely it:
- clarifies the current regulatory landscape on personal recommendations of retail investments and brings together in one place the existing FCA guidance that is available to firms and guidance from the Committee of European Securities Regulators and the European Securities and Markets Authority;
- summarises the results of the thematic review that the FCA has recently carried out examining the new distribution models firms are using to sell investment products to customers in the retail investment market, some of which provide a personal recommendation and some of which do not. The FCA has published this thematic review (TR14/10) alongside its guidance consultation;
- reports on the customer research that the FCA carried out specifically for the project, to understand how customers use services without a personal recommendation and their perception of the service they receive; and
- provides detailed examples of business models and in each case offers a view on whether the FCA thinks the example is regulated advice or not. The FCA asks if it would be helpful to include these examples in its Perimeter Guidance manual.
GC14/03 identifies three main areas for additional FCA work, namely:
- what is and what is not a personal recommendation in relation to retail investments;
- how the FCA might give firms more confidence to provide shorter more useful disclosures to customers about their products; and
- how the FCA provides guidance to the industry and how this supports confidence and innovation in products and services.
The deadline for responding to GC14/03 is 10 October 2014.
View Guidance Consultation 14/03: Retail investment advice – clarifying the boundaries and exploring the barriers to market development, 11 July 2014
View Thematic Review 14/10: Developments in the distribution of retail investments: purchasing investments without a personal recommendation or with simplified advice, 11 July 2014
